Do synergies exist in related acquisitions? A meta-analysis of acquisition studies

Homberg, Fabian; Rost, Katja; Osterloh, Margit

doi:10.1007/s11846-009-0026-5

Cited by 43 publications

(14 citation statements)

References 82 publications

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“…Considering that relative size (Homberg et al . ; Ranft and Lord ) and firm status (Hambrick and Cannella ; Paruchuri et al . ) are significant predictors of M&A success, both of which are related to whether a deal is an acquisition or a merger, this might be a shortcoming.…”

Section: Discussionmentioning

confidence: 99%

“…Teerikangas and Joseph 2012). Considering that relative size (Homberg et al 2009;Ranft and Lord 2002) and firm status (Hambrick and Cannella 1993;Paruchuri et al 2006) are significant predictors of M&A success, both of which are related to whether a deal is an acquisition or a merger, this might be a shortcoming. Yet, distinguishing between mergers and acquisitions is difficult and various dimensions, such as potential discrepancies between deal framing and actual occurrences during the integration process need to be considered (cf.…”

Section: Discussionmentioning

confidence: 99%

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The Challenge of Integration: A Review of the M&A Integration Literature

Steigenberger

2016

Int J Management Reviews

130

126

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The integration of acquired or merging firms is a key driver of the success or failure of mergers and acquisitions (M&As). Over the last 30 years, a substantial body of research has addressed M&A integration, offering rich but widely dispersed insights into this phenomenon. This paper takes stock of the current knowledge, based on a review of articles published in scholarly journals. The review advances the conceptual understanding of the phenomenon by inductively developing an overarching framework for the M&A integration literature, where integration success is a function of context, structural and communication‐based interventions, which interact with collective sensemaking processes and negotiations among integration stakeholders. Based on this framework, a research agenda is suggested. I proposes that, in particular, the interaction between structural interventions and leadership warrants further study. Also, little is known about integration project management and integration team composition or the interaction between integration context and collective sensemaking processes. Finally, there is a shortage of research on temporal dynamics within integration projects. The review demonstrates that M&A scholars made substantial progress regarding our understanding of the M&A integration process, yet much remains to be done.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

The Challenge of Integration: A Review of the M&A Integration Literature

Steigenberger

2016

Int J Management Reviews

130

126

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“…Organizational culture is often evoked as main adversary or issue of strategic management, which is particularly true for mergers and acquisitions where culture clash (Van den Steen, ) or ‘poor culture‐fit or lack of cultural compatibility have become much cited, if rather poorly defined, reasons for M&A failure’ (Cartwright and Schoenberg, , p. S3). In looking at Table again, one aspect of this critical definition poverty is that organizational culture is—by implication—mostly defined in terms of inter‐segmental diversity (Dauber, ; Homberg et al , ; Jordão et al , ): The focus clearly is on national culture distance or on differences in often Hofstede‐inspired country scores, the latter of which also include gender‐related items. Gender is sometimes also the main topic of research on mergers and acquisitions (Tienari, ).…”

Section: Applicationsmentioning

confidence: 99%

Multiplying the Division of Labour: Functional Differentiation of the Next Key Variables in Management Research

Roth

Sales²,

Kaivo‐oja³

2017

Syst. Res

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In this article, we draw on theories of social differentiation to show that functional differentiation is not about the division of work and organization, but rather about a multiplication of horizons for decision‐making. We argue that a systematic management of functional differentiation makes organizations smarter and more flexible. We corroborate this claim by demonstrations of how a functional approach to functional differentiation facilitates the design of new or the further development of well‐established management tools and research agendas in fields such as entrepreneurship, strategy, and human resource management. Copyright © 2017 John Wiley & Sons, Ltd.

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“…There is a large body of evidence in the economics and financial literature to indicate that mergers and acquisitions have a poor record of success, with the main beneficiaries being the sellers of businesses who reap a one-off gain from the premium paid to acquire their firm (Andrade, et al, 2001;Haleblian, et al, 2009). The poor long-run performance of acquirers may be also be because of excessiveprice premiums paid for acquisitions, with an average premium of about 30% over stock market value in recent merger waves (Antoniou, Arbour& Zhao, 2008;Moeller, Schlingemann, & Stulz, 2004) Considerable research evidence exists to show that the generally poor outcome of acquisitions results from the fact that the hoped for synergies are rarely realised (Ficery, et al, 2007;Homberg, et al, 2009). The research on this topic tends to be largely from finance, however, and tends to have a bias in terms of focusing on cost efficiencies rather than on revenue generation.…”

Section: Marketing and Mergers And Acquisitions: A Reviewmentioning

confidence: 99%

“…Considerable research evidence exists to show that the generally poor outcome of acquisitions results from the fact that the hoped for synergies are rarely realised (Ficery, Herd& Pursche, 2007;Homberg, Rost& Osterloh, 2009). The research on this topic tends to be largely from finance and accounting and focuses predominantly on financial measures, and cost savings in production and related issues.…”

Section: Introduction: Statement Of the Research Problemmentioning

confidence: 99%

Creating or destroying value through mergers and acquisitions: A marketing perspective

Rahman

2015

Industrial Marketing Management

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The world has witnessed a major wave of mergers and acquisitions (M&A) through the 1990s and up to 2007.A majority of these M&A deals are horizontal, involving the purchase of another company in the same industry. Such acquisitions imply a motivation to increase revenues by expanding market scope and/or market share, and/or by adding new products to the portfolio. They also suggest a pursuit of cost efficiencies in various aspects of operations. Whether these benefits are actually realised is an empirical question that has attractedresearch in several disciplines, including economics, finance and accounting. By now, there is a large body of research evidence to indicate that M&As have a poor record of success, with the main beneficiaries being the sellers who reap a one-off gain from the premium paid to acquire their firm.The objective of this dissertation was to examine post-merger performance from a marketing perspective, a topic that has not been explored thus far. This study followed a multi-stage approach; in the first stage an exploratory case study was conducted to identify the parameters of the research problem and to develop a set of hypotheses. Following this, a quantitative study of a sample of M&A transactions was carried out to test these hypotheses.The exploratory case study was based on Tata Motors, an Indian company which acquired Jaguar and Land Rover from Ford Motors. This case investigation based on both primary data collected through in-depth interview and a wide spectrum of secondary sources, showed that the acquisition had a significantly positive impact on Tata Motors' marketing performance, with sales volume and revenue growing significantly in the post-acquisition years. However, these sales increases came at a high cost; the company invested a huge amount in new product development and marketing communications, with the result that profit performance was negatively affected in the three years post-merger. Profit margins increased, however, in the seventh year 2014, suggesting that the reduction post-merger may have been a temporary effect.The quantitative study was based on a sample of forty-five M&A deals involving ninety US companies.This longitudinal study examined performance over six years, three before the merger, and three yearsafter the merger. Four analytical toolswere used:a paired sample t-test, an analysis of effect size, an analysis of covariance (ANCOVA), and regression analysis, to examine post-merger performance. The results of both raw data and log-transformeddata analyses showed that sales revenue increased significantlyin the post-merger years compared to the pre-merger years. Moreover, the combined companies reduced their marketing and selling costs in proportion to sales revenue. However, there was asignificant reduction in profit as measured by return on sales (ROS).Combining the findings from both the qualitative and quantitative studies, we concluded that post-merger marketing performance improved, i.e. sales revenue and cost of marketing and selling, but...

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Do synergies exist in related acquisitions? A meta-analysis of acquisition studies

Abstract: Mergers and acquisitions, Meta-analysis, Business relatedness, Size relatedness, Technological relatedness, Cultural relatedness, Synergies, G34, M19,

Cited by 43 publications

References 82 publications

The Challenge of Integration: A Review of the M&A Integration Literature

The Challenge of Integration: A Review of the M&A Integration Literature

Multiplying the Division of Labour: Functional Differentiation of the Next Key Variables in Management Research

Creating or destroying value through mergers and acquisitions: A marketing perspective

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